What has changed?
If you are liable to pay Stamp Duty Land Tax (see details below), then until 28 February 2019 you have 30 days in which to submit your tax return and pay any tax due to HMRC. It is important to note that this timescale is soon to change …
For transactions that complete on or after 1 March 2019, this timescale for submitting the tax return and paying the duty due is going to be shortened to 14 days, so it is even more important to ensure that these deadlines are prioritised!
You should also ensure you swiftly give your solicitor any information that they request in order to complete this for you, to avoid any delays and to ensure that penalties are not unnecessarily incurred.
Let’s start at the beginning…
What is SDLT?
You must pay Stamp Duty Land Tax (otherwise referred to as “SDLT”) when you buy property or land of a certain value in England and Northern Ireland. If you purchase land or property in other areas such as Scotland or Wales, then different taxes are payable.
You must pay the tax when you:
- buy a freehold property
- buy a new or existing leasehold
- buy a property through a shared ownership scheme
- are transferred land or property in exchange for payment.
How much do I have to pay?
You only pay SDLT on residential purchases over £125,000, or £150,000 where the property is non-residential or mixed use and, in some cases, must still submit a return, even if no Stamp Duty is payable.
The HMRC website has further guidance on this which can be consulted if you are unsure. See https://www.gov.uk/stamp-duty-land-tax for further information.
If you are a first-time home buyer, you may be able to claim a discount or relief on your purchase, subject to meeting certain conditions which your solicitor/accountant will be able to advise you on.
There are also certain other reliefs available to certain groups/entities so it is always worth checking if any of these may apply.
HM Revenue and Customs (HMRC) has a useful online calculator that can help you work out any potential SDLT liability. You can find it by following the link below, however your solicitor will usually be able to assist you with this as part of the conveyancing process:
How do I pay?
In order to satisfy any liability, you must ensure that an SDLT return is filed (again your solicitor can help with this), and the SDLT due is paid direct to HMRC.
As mentioned above, for transactions completed before 1 March 2019, you have 30 days to submit the return and pay the tax due otherwise you are likely to incur financial penalties which can include interest. The minimum penalty is £100. This will change to 14 days as of 1 March 2019.
If you would like advice on the finer details of this update or on any prospective purchases you’re thinking of making, please do not hesitate to contact a member of our experienced commercial property team on 01642 610300.